harrah's entertainment wachovia_b

Jonathan Halkyard

Senior Vice President and Treasurer

Harrah’s Entertainment, Inc.Confidential and Proprietary

2005

Safe Harbor StatementThis presentation includes "forward-looking statements" intended to qualify for the safe harbor from liability established by thePrivate Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements contain words such as "may," "will," "project," "might," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "continue" or "pursue," or the negative or other variations thereof or comparable terminology. In particular, they include statements relating to, among other things, future actions, strategies, futureperformance, and future financial results of Harrah's Entertainment, Inc. These forward-looking statements are based on currentexpectations and projections about future events. Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantified and, consequently, the actual performance or results of Harrah's may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, butare not limited to, the following factors as well as other factors described from time to time in our reports filed with the Securitiesand Exchange Commission (including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein): financial community and rating agency perceptions of Harrah's; the effects of economic, credit and capital market conditions on the economy in general, and on gaming and hotel companies in particular; construction factors, including delays, zoning issues, environmental restrictions, soil and water conditions, weather and other hazards, site access matters and building permit issues; the effects of environmental and structural building conditions relating to our properties; the ability to timely and cost-effectively integrate into Harrah's operations the companies that it acquires, access to available and feasible financing on a timely basis; changes in laws (including increased tax rates), regulations or accounting standards, third-party relations and approvals, and decisions of courts, regulators and governmental bodies; litigation outcomes and judicial actions, including gaming legislative action, referenda and taxation;the ability of our customer-tracking, customer loyalty and yield-management programs to continue to increase customer loyalty and same store sales; our ability to recoup costs of capital investments through higher revenues; acts of war or terrorist incidents; abnormal gaming holds; and the effects of competition, including locations of competitors and operating and market competition. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. Harrah's disclaims any obligation to update the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date stated, or if no date is stated, as of the date of this press release.


2005

Harrah’s Today


2005

At the foot of a steep growth curve through acquisition…

1998

1999

2004

2005


2005

At the foot of a steep growth curve overseas…


2005

At the foot of a steep growth curve in Las Vegas…


2005

At the foot of a steep growth curve in Atlantic City…


2005

Company OverviewLargest provider of branded casino entertainment

4 million square feet of casino space

40,000 hotel rooms

90,000 employees

40 million Total Rewards members


2005

Industry’s Broadest Footprint


2005

A Portfolio of Winning Brands


2005

Financial Strength

Only investment-grade gaming company

Borrows at industry’s most competitive rates

Nearly $1.2 billion of capacity under revolver

Revenues of nearly $9.0 billion on a pro-forma basis in 2005

Highest dividend yield in the gaming industry 2.0%


2005

Diversity Of Cash Flow Provides Stability, Funds Growth

Region # Properties % EBITDALas Vegas 7 35%Atlantic City 5 26%LA/MS 5 9%Illinois/Indiana 4 11%Iowa/MO 4 9%Managed / Intl / Other 12 10%TOTAL 37 100%


2005

#1 or #2 in every market in which we compete

Atlantic CityChicagolandMississippiS. Illinois/IndianaShreveport/ Bossier CityNew OrleansReno/TahoeCouncil Bluffs

Las VegasSt. LouisKansas CityLaughlin

HET gained share in nearly all of its markets in 2005


2005

HET Core Strategy

Brand Loyalty

Decision ScienceCapabilities

Drive same-store growth, cross-market play throughsuperior marketing and technological capabilities


2005

Evidence of HET’s organic growth engine

Cross-market play

CAGR: 18.5%

749 8811,063

1,2561,456

1,711

0200400600800

1,0001,2001,4001,6001,800

2000 2001 2002 2003 2004 2005

4.9%

8.9%

6.5%

1.5%

5.7%

7.5%

0%

5%

10%

2000 2001 2002 2003 2004 2005

Same-store sales growth


2005

10%5%3%

14%11%11%

21%20%23%

Local(< 70 miles)

Regional(70 – 300 miles)

National(300+ miles)

VIP

AEP

Retail

Loyalty strategy reflected in 4Q strength

Fourth-quarter rated customer trip growth


2005

Total Rewards: implications for 4 Caesars LV properties

60%

15%

21%

5%

HET

Tour & Travel

FIT

Convention

Total Rewards /Connection Card 20%

30%

39%

11%

CEI

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%


2005

Horseshoe – Merger Success

$0.00$0.05

$0.10$0.15

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

Horseshoe Market Share EPS Accretion

$0.41 of AccretionSince Merger Closing

0%

5%

10%

15%

20%

25%

30%

35%

Hammond Tunica Bossier City

12 months ended June 2004 Last tw elve months


2005

Growth opportunity


2005

Controllable growth pipeline

Organic

CaesarssynergiesTotalRewardsRevenuemanagementStrategicSourcing

LV Master PlanAC Center BoardwalkNew OrleansMetropolisCouncil Bluffs Caesars Indiana

Reinvestment

El Reino, SpainHarrah’s ChesterBaha MarEyeing select markets in Asia, Europe

NewDevelopment


2005

El Reino – Ciudad Real, Spain• 50,000 sq. ft. casino

• 850 hotel rooms

• 3,000 seat Colosseum theater

• Conference center

• 30,000 sq. ft. spa

• Multiple restaurants, bars

• Forum retail shops


2005

Harrah’s Chester Casino and Racetrack


2005

Baha Mar – Nassau, Bahamas


2005

Baha Mar – Nassau, Bahamas


2005

Prime Center StripLand Bank

18,000 Total GuestRooms

160 Acres fromHarrah’s to Bally’s /

Paris

80 Acres at CPLV, 90 Acres at Rio

1.25 miles of StripFrontage

110 Acres of Un/Underdevloped

Land


2005

An attractive value


2005

Valuation Comparison

* Peer Group includes: MGM, STN, BYD, PENN, AZR

5.5x6.5x7.5x8.5x9.5x

10.5x

Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06

Forw

ard

EV/E

BIT

DA

Mul

tiple

HET Peer Group Average


2005

Despite successful growth record, HET prospects discounted

Current Firm Value = NOPAT / WACC

95%

59%

54%

51%

43%

39%

24%

23%

5%

41%

46%

49%

57%

61%

76%

77%

110%

Ameristar

Penn

Harrah's

MGM Mirage

Boyd

Station

LVS

Kerzner

WYNN

Future Firm Value = EV – Current ValuePeer Avg future value = 57% EV (as

of 2/22)

8.4B

3.2B

21.0B

6.6B

6.1B

23.5B

23.9B

3.5B

1.7B


2005

HET focused on shareholder value

Source: Bloomberg

-150%

-50%

50%

150%

250%

350%

450%

Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05

HET SP500

25% Per Annum


2005

Positioned for long-term growth

Stable, diversified cash flow from operations

Consistent value creation

Strong position in each market of operation

Strong development track record

Modest value given growth prospects

Balance-sheet capacity to handle large developments, reinvestment

Continued focus on shareholder value creation


2005

This presentation and all trademarks appearing in this presentation are the sole and exclusive property of Harrah's License Company, LLC for use by its related companies (collectively,

"Harrah's"). This presentation and its contents is confidential and proprietary to Harrah's and may not be used or reproduced in whole or in part without Harrah's express prior written authorization.

Trademarks not owned by Harrah's that appear in this presentation are the property of the respective owners.

© 2005, Harrah's License Company, LLC.

Economy & Finance

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